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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Smt. P. Madhavi Devi & Shri A. Mohan Alankamony
Per Smt. P. Madhavi Devi, J.M.
This is assessee’s appeal for the A.Y 2010-11 against
the order of the CIT (A)-6, Hyderabad, dated 16.05.2018.
Brief facts of the case are that the assessee, an
individual, filed his return of income for the A.Y 2010-11 on
21.1.2011 declaring an income of Rs.2,96,400/- and the same
was processed u/s 143(1) of the Act. Subsequently, the AO came
to know that the assessee along with others has sold immovable
property during the assessment year under consideration, but
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ITA No 1584 and SA No 237 of 2018 Harish Kumar Gaddipathi Hyderabad.
has not admitted the income from Capital Gains in the return of
income filed for the A.Y 2010-11. Therefore, the assessment was
reopened by issuance of a notice u/s 148. In response to the said
notice, the assessee filed a letter dated 3.4.2017 requesting to
treat the return of income filed on 21.01.2011 as the return filed
in compliance of the notice u/s 148 of the Act. Thereafter, the
notices u/s 143(2) and 142(1) were issued and served on the
assessee.
During the assessment proceedings, the assessee
submitted before the AO that the assessee and three others were
the owners of the property which was sold vide sale agreement
cum GPA but the vendee had cheated the vendors and had not
complied with the terms of the agreement including the payment
of consideration to all the vendors who have executed the sale
agreement cum GPA. It was also submitted that the vendee has
not paid any consideration to the assessee and the co-owners till
the date of notice and hence sale agreement was sought to be
cancelled. The assessee also submitted that the subject property
is under his possession even on the date of filing the affidavit. The
AO, however, observed from the recitals in the AGPA that the
assessee and others have executed the sale agreement cum GPA
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ITA No 1584 and SA No 237 of 2018 Harish Kumar Gaddipathi Hyderabad.
and as per the agreement, it is seen that they have given vacant
and peaceful possession of the property to the vendees by duly
receiving the sale consideration. It was also observed that since
the assessee has received the consideration and has parted with
the possession of the property, provisions of section 53A of the
Transfer of Property Act would apply and the provisions of section
2(47)(v) of the Act also would apply. He further observed that the
vendee had pledged the property with financial institutions and
had obtained the loan of Rs.32.00 crores in the name of the
company in which he is a Director. He therefore, held that the
assessee as well as the other owners have physically handed over
the property to the vendee and hence the capital gains is
chargeable to tax in the hands of the assessee for the relevant
A.Y.
Aggrieved, the assessee preferred an appeal before the
CIT (A) who dismissed the same for want of appearance by the
assessee. The CIT (A) has recorded that on a number of occasions,
the appeal was posted for hearing and the assessee has been
seeking adjournments except for the last date of hearing i.e.
26.04.2018. Against this order of the CIT (A), the assessee is in
appeal before us. In addition to the grounds of appeal filed along
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ITA No 1584 and SA No 237 of 2018 Harish Kumar Gaddipathi Hyderabad.
with Form 36, the assessee has also raised certain other
additional grounds of appeal. He sought admission of the same
and adjudication of the additional grounds as well. The assessee
also filed additional evidence being the copy of the cancellation of
sale agreement cum GPA along with the public notice also and
copy of the petition filed before the Hon'ble A.P. High Court
against the vendee and also District Registrar for cancellation of
the earlier agreement of sale cum GPA. He submitted that these
documents goes to the root of the matter and to substantiate the
assessee’s claim that the assessee has not received the sale
consideration and the possession of the property also was not
handed over to the vendee. He therefore, prayed that the
additional grounds and also the additional evidence be admitted
and remanded to the file of the AO for denovo consideration.
The learned DR, however, supported the orders of the
AO and submitted that the assessee failed to cooperate with the
CIT (A) due to which the CIT (A) dismissed the appeal. The learned
DR submitted that the matter may be remanded to the file of the
CIT (A), if necessary, for adjudication on merits.
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Having regard to the rival contentions and the material
on record, we find that the assessee’s stand has been that he has
not received the sale consideration and also that he has not given
the possession of the property to the vendee. The AO has gone by
the recitals in the Registered agreement of Sale-cum-GPA that the
assessee has received the payment and has given the possession
of the property. We are of the opinion that the agreement of sale
cum GPA cannot be held to be the complete legal transfer of the
title. Further, the assessee’s contention that he has filed an
application for cancellation of the registration document and also
that his petition for such cancellation is pending before the
Hon'ble A.P. High Court is also worth consideration. In view of the
same, we deem it fit and proper to admit the additional grounds
as well as the additional evidence. Since this evidence requires
verification, we deem it fit to remand the issue to the file of the AO
for de novo consideration in accordance with the law. Needless to
mention that the assessee should be given a fair opportunity of
hearing and the assessee also shall co-operate with the AO for
early completion of the assessment.
In the result, assessee’s appeal is allowed for
statistical purposes.
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ITA No 1584 and SA No 237 of 2018 Harish Kumar Gaddipathi Hyderabad.
Since the appeal itself has been disposed of by this
order, the Stay Application filed by the assessee has become
infructuous and accordingly dismissed.
Order pronounced in the Open Court on 10th July, 2019.
Sd/- Sd/- (A. Mohan Alankamony) (P. Madhavi Devi) Accountant Member Judicial Member
Hyderabad, dated 10th July, 2019. Vinodan/sps
Copy to:
1 Shri Harish Kumar Gaddipathi, Flat No.304, 4th Floor, Legend Apartments, Banjara Hills, Hyderabad 500034 2 ITO Ward 14(2) Room No.634, 6th Floor, C Block, IT Towers, AC Guards, Hyderabad 3 CIT (A)-6 Hyderabad 4 Pr. CIT – 6 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File
By Order
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